HomeFinancial MarketsFed Holds Rate Steady, Hints at Incoming Rate Cuts

Fed Holds Rate Steady, Hints at Incoming Rate Cuts

The Federal Reserve decided to hold interest rates steady following its final policy meeting of the year, thereby keeping rates at a 22-year high in a range of 5.25%-5.50%. Still, the central bank hinted that it will be cutting interest rates next year as data indicated that inflation continues to cool.

Still, the Fed has not ruled out the possibility of future hikes next year if deemed necessary. “The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the Federal Reserve wrote in its policy statement released on Wednesday.

Markets are expecting the Fed to cut interest rates by a combined 75 basis points over the course of next year. This follows projections that inflation will fall to 2.4% next year, down from September’s 2.5% estimate, with a further drop to 2.2% by 2025.

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